Journal of Current Southeast Asian Affairs
SUN, Yun (2012), China’s Strategic Misjudgement on Myanmar, in: Journal of Current Southeast Asian Affairs, 31, 1, 73-96.
ISSN: 1868-4882 (online), ISSN: 1868-1034 (print)
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China’s Strategic Misjudgement on Myanmar
Abstract: Yun Sun argues that China’s policy failures on Myanmar in 2011 are rooted in several strategic post-election misjudgements. Following President Thein Sein’s inauguration in March 2011, the Sino–Myanmar relationship was initially boosted by the establishment of a “comprehensive strategic cooperative partnership,” and China sought reciprocation for its long-time diplomatic support in the form of Myanmar’s endorsement of China’s positions on regional multilateral forums. A series of events since August have frustrated China’s aspirations, however, including Myanmar’s suspension of the Myitsone dam and the rapid improvement of its relationship with the West. Several strategic misjudgements contributed to China’s miscalculations, including on the democratic momentum of the Myanmar government, on the U.S. –Myanmar engagement and on China’s political and economic influence in the country. China’s previous definition of Myanmar as one of China’s “few loyal friends” and the foundation of its strategic bluepr
int has been fundamentally shaken, and China is recalibrating its expectations regarding future policies. _ Manuscript received 18 February 2012; accepted 23 April 2012
Keywords: PR China, Myanmar, Myitsone dam
SUN Yun was the China Analyst of International Crisis Group based in Beijing from 2008 to 2011. This paper was finished during her tenure as a visiting fellow at the Center for Northeast Asia Policy Studies at Brookings Institution, USA. Her research mainly focuses on China’s foreign policy, especially China’s relations with developing countries and authoritarian regimes. E-mail: email@example.com
2011 marked a year of significant setbacks for China’s relationship with Myanmar. The rapid changes in Myanmar’s domestic politics brought serious challenges to both China’s existing interests in the country and its strategic planning for the future. Early in the year, after the March inauguration of the new Myanmar government, China possessed a well-developed strategic blueprint for its relations with its south western neighbour. Key elements of this blueprint – border stability, energy transportation, and economic cooperation – remained China’s basic considerations in Myanmar. Beijing, however, began to envision and foster an additional layer of strategic cooperation based on the traditional fraternal friendship and economic ties between the two nations. This additional diplomatic aspiration was manifested during the visit by the No. 4 military leader of China’s Central Military Commission six weeks after the inauguration of Thein Sein’s government, as well as through the establishment of a “comprehensive strategic cooperative partnership” two weeks later. “Coincidentally,” during the same time period, Yunnan province launched the “bridgehead campaign” aimed at turning Yunnan and Myanmar into China’s bridgehead into the Indian Ocean. Meanwhile, as reciprocation for China’s long-term diplomatic support, China solicited Myanmar’s endorsement of its positions on regional multilateral forums (especially the ASEAN), most notably on the issue of the South China Sea.
Since August, however, a series of events has frustrated China’s Myanmar aspirations. The suspension of the controversial Myitsone Dam project and the rapid improvement of Myanmar’s relationship with the West, especially with the United States, fundamentally shook Beijing’s previous understanding of Myanmar as one of China’s “few loyal friends” and rocked the foundation of its strategic blueprint. As a result, China is carefully recalibrating its expectations about Myanmar and, subsequently, adjusting its policies and commitments.
The setbacks China has encountered are deeply rooted in several strategic misjudgements about post-election Myanmar. From prior to the November 2010 elections until the announcement of the Myitsone Dam suspension, the Myanmar policy circle in China believed the elections would prompt no fundamental change in Myanmar’s domestic politics. China underestimated the democratic momentum encouraged then tolerated by the former military officials, along with their willingness to adapt and change. In China’s perspective, privileged military rulers would never give up their power willingly, and the new civilian government would be only marginally and negligibly different from the old junta. Secondly, China mistakenly regarded the U.S. engagement as failed and thought that it had ended after the 2010 elections, when Washington pronounced those elections as “neither free nor fair.” Most Chinese policy analysts believed that Myanmar had embarked on a long path of slow political changes and economic reforms conducive to China’s economic and strategic endeavours in the country. Last, but not least, China overestimated its political and economic influence in Myanmar and underestimated the anti-China sentiment of the local people, which led to a rather blind confidence in China’s policy towards Myanmar and the concomitant failures of 2011.
2 China’s Basic Interests in Myanmar
2.1 Border Stability
Beijing’s fundamental interests in Myanmar include three basic factors: border stability, economic cooperation, and an energy transportation route. Among these, border stability remains the top priority (Interviews with Chinese officials, Beijing, Kunming, July 2011). During 2009’s Kokang conflict, China learned the danger of a premature military resolution to hostilities among border ethnic groups. The conflict sent more than 37,000 refugees into China’s southwest Yunnan province and generated tremendous pressure for the Chinese authorities to maintain stability along the border (International Crisis Group 2010: 4).
Prior to the 2010 elections, the Kokang conflict led China to prioritize “peaceful negotiation” as a solution to the ethnic group issues. During this period, there was a genuine fear in China that Naypyidaw’s repeated ultimatums for ethnic groups to disarm and transfer into Border Guard Forces would escalate tensions and result in a full military confrontation (International Crisis Group 2010: 4). To prevent such a disastrous scenario, China mobilized its diplomatic influence and quietly intervened between Naypyidaw and the two main ethnic armed forces along the Sino–Burmese border: the Kachin Independence Army (KIA) and the United Wa State Army (UWSA).1 A strategy of “persuading for peace and promoting talks” ( ) was pursued at both central and local levels. Senior Chinese leaders openly lectured Myanmar leaders on maintaining “peace and stability” at the border (Ministry of Foreign Affairs 2009; BBC 2010; China News Agency 2010). Local Yunnan officials also made “restraints” and “no war” their lobbying key words whenever they met with leaders from KIA and UWSA (Interviews with local officials, Kunming, July 2011). China was pleased to see the relatively peaceful and smooth power transition in Myanmar during 2011. This had a determining impact on China’s attitude toward the ethnic groups. Under the assumption that Myanmar would remain China’s loyal friend and warrant China’s help in resolving its ethnic group issue, China’s position on the ethnic groups gradually shifted from maintaining the status quo towards promoting reconciliation. This new point was made repeatedly by top Myanmar specialists in Beijing and Yunnan: “[t]he national unity of Myanmar is Naypyidaw’s natural right. The ethnic groups cannot hope to maintain their semi-independent and armed status forever” (Interviews with government analysts, Beijing and Kunming, July 2011).
This thinking has dominated China’s policy towards the armed conflicts between KIA and Tatmadaw since early June 2011. Unlike the Kokang conflict, during which China expressed great displeasure and demanded that Naypyidaw respect the border stability, the Kachin conflict resulted in little reaction from Beijing. China strengthened its border patrols against potential refugee flows2 and called for restraints and negotiations (Press Conference, Ministry of Foreign Affairs, June 16, 2011). However, it declined the KIA’s public appeal for China to be the referee during its negotiations with Naypyidaw (Dongfangwang 2011).
Besides genuine interest in resolving the ethnic group issue, several additional factors contributed to China’s indifference toward the KIA. Firstly, the conflict did not result in a large flow of refugees over the Chinese border, as most of the refugees gathered at KIA headquarters in Laiza, alleviating China’s deepest concerns over border security (Interview with KIA officers, Ruili, July 2011). Secondly, from China’s perspective, it was the KIA that attacked the Tatmadaw over the control of the Chinese Dapein Dam in Shan State, using the project as leverage in an attempt to force China to intervene (Dong Fang Zao Bao 2011a). The KIA’s lack of respect for Chinese commercial interests is also perceived through its strong opposition to the Chinese Myitsone Dam project in Kachin State (Interviews, Beijing and Kunming, July 2011). Thirdly, China sees the KIA’s political aspirations as “unrealistic.” It believes that the KIA is ultimately seeking independence and the conflict is merely a way to strengthen its negotiating position against Naypyidaw. According to a local Chinese official, “KIA’s stubborn adherence to the 1947 Panglong Agreement was completely out of touch with reality” (Interview, Kunming, August 2011). Finally, China’s historical suspicion of the pro-West, Christian, Kachin population deepened during the past twelve months when Kachin organizations sent several delegations to Washington seeking help, thus triggering China’s deepest fear of “Americans being invited in to meddle with affairs on the Chinese border” (Conversation with Chinese analysts, Spring 2011).
While the Kachin conflict continues with no speedy resolution in sight, the negotiations between Naypyidaw and the UWSA yielded promising results. In September, it was reported that the two sides reached a preliminary agreement over a ceasefire and the reopening of peace talks (McCartan 2011). Although the agreement does not resolve fundamental issues, such as the armed status of the UWSA and the scope of its autonomy, China finds such an agreement highly desirable as it includes peace and stability in the mutually accepted agreement.
2.2 Economic Cooperation
China identified the new civilian government in Myanmar as opening up tremendous business opportunities for Chinese commercial endeavours within the country (China News Agency 2011). A relatively smooth power transition consolidated the legitimacy of the new government. With Naypyidaw’s top security concern resolved, Beijing believed the Myanmar government would next focus on domestic economic development in an effort to boost its legitimacy (Interviews, Beijing and Kunming, August 2011). This is where China wished to step in, continuing to fill the void created by Western sanctions in the country.
Both bilateral trade and Chinese investment in Myanmar had grown substantially before the inauguration of the Thein Sein government. According to the Chinese Ambassador in Myanmar, bilateral trade grew by 52.3 per cent to 4.4 billion USD in 2010 (Chinese Embassy in Myanmar 2011). According to Myanmar official statistics, between April 2010 and March 2011, China invested 7.75 billion USD in Myanmar, focused mostly in the natural resources and energy sectors.3 (The Chinese statistics showed a total invest ment of 12.32 billion USD in 2010; Xinhua News 2011a).4 China continues to emphasize Myanmar as an important hydropower supplier to energy-thirsty south western China. Approximately 54 per cent of China’s total investment in the country has been focused on hydropower dam projects (Li 2011). In May 2010, during Thein Sein’s visit to Beijing, the two countries signed nine economic agreements, including one hydropower project and a 745 million USD credit provided to the Myanmar Ministry of Finance by China Development Bank (BBC 2011).
2.3 Energy Transportation Route
Currently, the oil and gas pipeline project from Myanmar to Yunnan province is seen by China as the most important project in Myanmar (Interview with Chinese analyst, Beijing, January 2012). China hopes the project will mitigate its dependence on the Malacca Strait for most of its oil imports from North Africa and the Middle East (IHN 2010). Since the beginning of its construction in June 2010, the pipeline project has enjoyed smooth progress. Some key components, such as the bridges over the Myitnge River and the Maday Island reservoir, were completed in the fall of 2011 (CNPC News 2011). China is optimistic that, by 2013, the pipelines will be able to transfer 22 million tons of crude oil from North Africa and the Middle East, as well as 12 billion cubic meters of natural gas from Myanmar’s offshore gas fields into China (Xinhua Net 2010).
Although Chinese analysts acknowledge that such pipelines will not free China from its strategic vulnerability in the event of a military blockade of the Malacca Strait (International Crisis Group 2010: 9), expectations remains high that, once completed in 2013, the pipeline project will serve as a prequel to China’s expansion of trade relations with, not only, Myanmar but, also, Southeast Asia and South Asia (Xinhua News 2011b). Meanwhile, local authorities aspire for the pipelines to bring refineries to Yunnan and turn the province into the new energy and trade hub of south western China (People’s Daily website 2010).
3 China’s Strategic Blueprint for Myanmar
3.1 Evolution of China’s Strategic Perception of Myanmar
China’s strategic perception of Myanmar has undergone different stages since the establishment of diplomatic relations between the two countries. At various times, Myanmar’s importance to China has fluctuated. In 1949, just after the founding of the People’s Republic of China, Burma, as the first non-socialist country to establish diplomatic relationship with Beijing, was a third-world friend that helped China to break its international isolation (Zhu 2009). Before 2000, political friendship (or paukphaw friendship) was the one – and almost only – highlight of bilateral relations (Interview with former Chinese Ambassador to Myanmar, November, 2009). Political ties were strong, but other factors, such as economic cooperation, lagged behind. During this period, Burma was seen as China’s political friend.
Around 2000, as China began to seek new resources and markets, the economic cooperation between the two countries picked up speed. Myanmar, conveniently located along the Chinese border and rich in natural resources (such as hydropower, minerals, timber, and jade), turned out to be a natural destination for Chinese investment and business (Guo Ji Shang Bao 2006). First led by border trade, the economic campaign soon became dominated by large Chinese state-owned enterprises seeking energy and mineral supplies from Myanmar (Interview with Chinese analysts, Kunming, August 2011). By 2010, China became Myanmar’s biggest investor and secondlargest trading partner (People’s Daily 2011b; Xinhua News 2011a). During this period, Myanmar, as a supplier of natural resources and raw materials, achieved a highly important status as an economic partner to China (Interview with former Chinese Ambassador to Myanmar, August 2011).
Thus, political friendship and economic cooperation were the two cornerstones of China’s relationship with Myanmar, with little or no specific mentioning of the country’s strategic importance. Analysts and officials talked about Myanmar as a corridor into the Indian Ocean, but the purpose was mostly for trade and transportation routes. The U.S. attempt to alienate the Myanmar–China friendship was also discussed, but the focus was Washington’s strategic intention, rather than Myanmar’s own strategic utility. China, in general, did not actively seek to build a formal or strong strategic relationship with Myanmar.
Some Chinese analysts explained China’s reluctance as a careful calculation not to antagonize other regional players, such as India (Interview with Chinese analysts, Kunming, August 20). Others emphasized the xenophobic nature of the military government and its deep suspicion of and unwillingness to form too close a strategic tie with its northern neighbour (Interview with Chinese analysts, Beijing, July 2011). More importantly, China, in the past, could afford not to look at Myanmar through a strategic and regional lens because its strategic priority had remained primarily domestic and along the border. However, as China’s national interests and influence expand in the region, Myanmar’s strategic importance has increased substantially. This importance is manifested through four initiatives China has taken since the inauguration of the Thein Sein government: the establishment of a comprehensive strategic cooperative partnership; China’s seeking of Myanmar’s support in regional diplomacy; the potential enhancement of military cooperation; and Yunnan’s bridgehead strategy.
3.2 A Comprehensive Strategic Cooperative Partnership
During Thein Sein’s visit to Beijing in May 2011, China and Myanmar announced the elevation of their bilateral relations to a “comprehensive strategic cooperative partnership” (Xinhua News 2011d). This is the first time that the Chinese government defined the bilateral relationship as a strategic one, clearly signalling a new definition of the affiliation. Indeed, Song Qingrun, the Myanmar specialist at one of China’s top think tanks, the China Institute for Contemporary International Relations, publicly commented that such an elevation was a natural next step following decades of cordial political friendship and economic cooperation (Guo Ji Zai Xian 2011). The expectation was extremely high for the Sino–Myanmar “kinship” to get closer and closer (Guo Ji Zai Xian 2011).
In outlining the specifics of what the comprehensive strategic cooperative partnership constitutes, Chinese President Hu Jintao emphasized four basic components: elevating bilateral relations and expanding exchanges and cooperation at all levels, strengthening mutual strategic support, deepening pragmatic cooperation, and maintaining border stability (Xinhua News 2011e). The first and the last components revisit old territory, as China has always aspired to improve relations and maintain border stability. The other two, however, indicated certain new elements in China’s aspirations in Myanmar. Firstly, “mutual strategic support” signals China’s expectation for reciprocity between China and Myanmar on strategic issues. Domestically, China respects the development path and political system chosen by the Myanmar people and supports the efforts of the new government to maintain stability, develop economy, and improve the livelihood of Myanmar people. And China highly compliments the Myanmar government’s unswerving support of the One China policy.
In essence, China’s support of the new government in Myanmar has been and will continue to be met and matched by Naypyidaw’s support of the “One China–policy” (Xinhua News 2011e). In terms of foreign policy, China wishes to “strengthen the cooperation with Myanmar on regional frameworks, including ASEAN+3, ASEAN+1, and Greater Mekong Sub- Regional Economic Cooperation.” In other words, Beijing hopes for more coordination with Myanmar to support each other’s positions on the regional multilateral platforms, turning Myanmar into a useful ally to support the Chinese regional foreign policy agenda (Interview with Chinese analysts, Beijing, July 2011). (Further discussed below).
Secondly, “mutually beneficial and pragmatic cooperation” clarifies that China’s economic relationship with Myanmar has to benefit not only Myanmar, but also China (Interview with Chinese analysts, Kunming, August 2011). Hu detailed several areas for expanded cooperation in which China is interested, including energy, power, transportation and agriculture. He also specifically emphasized the importance of the on-schedule completion of large cooperation projects currently under construction (Xinhua News 2011e). Some analysts argue that China’s “partnership” diplomacy is nothing new. China established strategic partnerships with Russia and the U.S. in the 1990’s, and gradually expanded the scope of “strategic partners” to other powers (UK, French, Germany, India) and neighbouring countries (Pakistan, Indonesia, South Korea, Laos, Cambodia, Vietnam) over the past ten years.5 However, given the importance of Myanmar to China and the close ties between the two countries, the fact that a “strategic partnership” with Myanmar was not established until 2011, by itself, is intriguing. The coincidence of the timing (the partnership was established immediately after the inauguration of the new civilian government) is a clear indicator of China’s changing perception of Myanmar from a political and economic friend (under the junta) to a strategic partner (under a legitimate civilian government). Although Chinese analysts maintain that this partnership does not have a military component nor is it targeted at other regional countries (Interviews with Chinese analysts, Beijing and Kunming, July 2011), some developments in bilateral relations might prove otherwise.
3.3 China Seeking Myanmar’s Support on Multilateral Platforms
According to the statement made by Chinese President Hu Jintao on the establishment of the comprehensive strategic cooperative partnership, a key component of the partnership concerns Myanmar’s role in the regional multilateral platforms. China wishes to “coordinate with Myanmar on ASEAN+3, ASEAN+1, and the Greater Mekong Sub-Regional Economic Cooperation to protect the interests of Myanmar and China” (Xinhua News 2011e). The underlying logic here is: now that Myanmar has finally achieved some legitimacy at home and abroad, its international status and reputation have improved. (Myanmar will become the chair of ASEAN in 2014, a scenario unthinkable during the military government.) As Myanmar gradually re-integrates into the international community, it has the potential to become a solid, powerful diplomatic supporter of China’s national interests and policy preferences in the region (Interviews with Chinese analysts, Beijing and Kunming, July 2011). After years of shielding Myanmar internationally, the time has come for Myanmar to “reciprocate” (Interviews with Chinese analysts, Beijing and Kunming, July 2011).
China’s most immediate expectation of Myanmar is support for China’s position on South China Sea issues at ASEAN. Three key ASEAN members – Vietnam, the Philippines and Malaysia – have major territorial disputes with China in the South China Sea, with the tension’s reaching an historic high during the first half of 2011 (Thayer 2011: 5). ASEAN claimants have been seeking to engage in multilateral negotiations with China, through ASEAN as a group, to mitigate the overwhelming leverage of a powerful China during bilateral negotiations with individual countries (Interviews with Vietnamese, Philippine and Malaysian diplomats, Ho Chi Min City, December 2010). China, however, has consistently pursued a bilateral negotiation formula to settle the disputes. China has insisted that Myanmar support its positions, especially the “bilateral negotiations” formula at ASEAN. This expectation was directly conveyed to Myanmar officials before the 2011 July ASEAN Regional Forum in Bali (Interview, Rangoon, August, 2011). Another instance of China’s seeking Myanmar’s support on Chinese policy is the establishment of the joint patrol of Mekong River by China, Myanmar, Thailand, and Laos after the October killing of 13 Chinese shipmen. Allegedly, the original proposal by China met strong opposition from Thailand (Interview, Beijing, October, 2011). Myanmar’s support of the joint patrol scheme helped China reach a speedy resolution of the differences (Interview, Beijing, October, 2011).
3.4 Potential Military Cooperation
Preceding the establishment of the comprehensive strategic cooperative partnership, China dispatched to Myanmar the most senior military delegation in recent years,6 headed by the No. 4 leader of China’s supreme military command, Central Military Commission (CMC) Vice Chairman Xu Caihou (Xinhua News 2011c). Prior to this, the most recent visit by a senior Chinese military leader to Myanmar was more than two years ago by the PLA Chief of Staff, Chen Bingde, in March of 2009 (Chinese Embassy in Myanmar 2009).
There has been no public disclosure of the results of Xu’s visit regarding any details of military cooperation between China and Myanmar, discussed by the two sides “enthusiastically and at length” (Xinhua News 2011c). Many different interpretations of the trip have emerged from within China. Various Chinese analysts have downplayed the significance of the visit, calling the head of the delegation, Xu Caihou, a “random choice among senior Chinese leaders” and his presence there a “regular visit by PLA to Myanmar” (Interview with Chinese analysts, Beijing, July 2011).
A close look at the composition of Xu’s delegation reveals a rather different story. Along with the regular senior leaders of the Chengdu Military Region (under which the Sino–Myanmar border falls),7 Xu was accompanied by the Deputy Chief of the General Armament Department and the Political Chief of the South Sea Fleet (PLA Daily 2011). The General Armament Department is in charge of arms sales, and the South Sea Fleet recently had two vessels visit Myanmar during their return trip from the Gulf of Arden in 2010 (Xinhua News 2011f). Given that each member of Chinese delegations is always carefully selected to fulfil a certain mission, the inclusion of these two officials serves, at least, as an indication of China’s emphases on its military relations with Myanmar: arms sales and naval cooperation.8
3.5 Yunnan’s Bridgehead Strategy
As part of the “Twelfth Five Year Plan” launched in 2011, China formally introduced the national “bridgehead strategy,” which proposes to turn Yunnan into a strategic corridor and a bridgehead for China’s strategic engagement in the Indian Ocean (Yunnan Wang 2011). As the Vice Governor of Yunnan explained, China’s main theater of international relations is the oceans. China’s coastal line is on the east side, leading naturally to the strategic prioritization of the Pacific. For inland China, however, it is more convenient and active to use the Indian Ocean as the outlet. The bridgehead strategy will free China from the “strategic passiveness” of the “One Ocean Strategy” (China News 2011).
The bridgehead strategy itself is a manifestation\ of China’s pursuit of the “Two Ocean Strategy” and represents China’s strategic aspirations in the Indian Ocean. Although most of the reports, by far, have focused on the economic, trade, and transportation aspects of the bridgehead strategy, government analysts from both Beijing and Yunnan privately acknowledged that the orientation of such a strategy has an eventual political and security component and that “the bridgehead strategy itself is China’s strategic offensive into the Indian Ocean” (Interviews, Beijing and Kunming, November 2011).
There are ample analyses in China calling for a more active Indian Ocean strategy and for turning Pakistan and Myanmar (two of China’s most loyal friends) into outposts of China’s strategic outreach into the Indian Ocean (Interviews, Beijing, May 2011). To facilitate this goal, many assert that China must go beyond the existing political and economic ties with Myanmar and pursue security and military cooperation. Some hardliners even go as far as calling for the expansion of China’s naval forces and the establishment of a military base in the Indian Ocean to protect the security of communication sea lines, as well as to maximise China’s geopolitical interests (Interviews, Beijing, May 2011). By comparison, the bridgehead strategy seems to be the least threatening, among all the choices, in establishing and enhancing China’s strategic outreach into the Indian Ocean.
4 Major Setbacks in China’s Myanmar Strategy
Although China has crafted specific plans to enhance Myanmar’s strategic importance to China, such plans have encountered unanticipated obstacles and setbacks since the fall of 2011. Spearheaded by President Thein Sein’s decision to suspend the Myitsone Dam project on September 30 and followed by the rapid improvement of relations with the United States, Myanmar’s moves surprised and frustrated many in China, forcing China to reconsider its strategies towards its south western neighbour.
4.1 The Myitsone Dam Suspension
President Thein Sein’s decision, during the fall of 2011, to suspend the Myitsone Dam project came unexpectedly for Beijing. Although the Myitsone Dam had always been controversial and garnered tremendous public opposition, China did not think that Naypyidaw would dare to jeopardise a project of such large scale and great importance to China – an opinion firmly held by analysts and officials prior to the announcement (Interviews with Chinese analysts, Beijing, Kunming and Rangoon, July and August 2011). This extreme confidence was based on the fundamental belief that an isolated and sanctioned Myanmar would not risk angering its largest political and economic patron over a dam project. Despite the repeated appeals by Naypyidaw for China to reconsider the project and reassess its environmental impact, China brushed off such messages, believing the government was effectively “silenced.”9
China attributes the suspension decision to both internal and external factors in Myanmar. On the one hand, China feels the dam project is the victim of Myanmar’s urge to improve relations with the U.S. (Interviews, Beijing, October 2011. And People’s Daily 2011a). Chinese analysts noted that the suspension decision was made after rounds of heated engagement between Naypyidaw and Washington and concluded that the encouraged Naypyidaw “felt the urge to show Washington that it is not China’s client state and truly represents the people” in an effort to solicit more rewards from the U.S. (Interviews, Beijing, October 2011. And People’s Daily 2011a). The Myitsone Dam project, as a controversial and therefore easy target, was “unfortunately” sacrificed.
On the other hand, while China recognizes there is strong anti-China sentiment in Myanmar, it refuses to acknowledge that such sentiment is indigenous (Interviews with analysts, Kunming and Rangoon, July and August 2011). China did not believe that Myanmar could transform from an authoritarian state to a liberal democracy within a few months and that public opinion could, seemingly overnight, become a determining factor in Myanmar politics (Interviews with Chinese analysts, October 2011). In China’s view, therefore, the cancelation was the result of Western countries and NGOs’ instigating the anti-Myitsone movement within and outside Myan mar (People’s Daily 2011a). The Wikileak reports on the U.S. Embassy’s funding of anti-Myitsone activities within and outside Myanmar confirmed such suspicions and reinforced China’s perception that Western efforts to sabotage Chinese projects and alienate China–Myanmar relations are primarily motivated by the geopolitical goal of curbing Chinese influence (World Knowledge 2011).
Under these circumstances, China’s initial response to the Myitsone Dam decision was hawkish and resolute. According to the statement made by the Chinese Ministry of Foreign Affairs, the legitimacy and validity of the Myitsone Dam is not an issue since the project has “gone through scientific verification and strict examination by both sides.”10 At this point, any issues about the project are merely “relevant matters arising from the implementation of the project” and “should be handled appropriately through bilateral friendly consultation.”11 During his October 21 meeting with Myanmar Vice President Tin Aung Myint Oo, Premier Wen Jiabao urged the Myanmar government to “keep its promises” and “implement the consensus reached” (Dong Fang Zao Bao 2011b). Apparently for China, the issue to be discussed was not whether the project should or would be implemented, but how to resolve any differences on the specifics of its implementation.
Meanwhile, China hoped that differences on the project could be resolved through negotiations. Some analysts suggested that the original plan could be revised but the project should continue. Otherwise, a complete abandonment would be excessive unnecessary, and “humiliating” for China (Interviews with Chinese analysts, Beijing, October 2011). Furthermore, if Naypyidaw insisted on abandoning the project, China – especially China Power International (CPI) – would not offer a waiver for compensation. CPI has invested more than 42 million USD in the Myitsone Dam, including 18 million USD on the relocation of local populations alone (Interviews with Chinese analysts, Beijing, November 2011). Other spin-off infrastructure projects include factories, bridges and roads. The total amount of the compensation could be astronomical and well beyond the solvency of the Myanmar government.12
As these harsh responses failed to reverse Thein Sein’s decision, China readjusted its initial position to prepare for an eventual, complete abandonment of the Myitsone Dam project (Interviews with Chinese analysts, Washington DC, January 2012). According to Chinese analysts, Beijing has decid ed to redefine the project as a commercial project between Chinese and Myanmar companies, mitigating the government’s involvement and the project’s political significance (Interviews with Chinese analysts, Washington DC, January 2012). Chinese investors still need to be compensated for investments already made but will relinquish punitive claims for collateral damage (Interviews with Chinese analysts, Washington DC, January 2012). The Myitsone suspension has a major impact on China’s perception of and relationship with Myanmar. It is cited as a third case of Naypyidaw’s openly challenging China’s national interest while embarrassing China internationally. (The other two cases are the 2005 relocation of the capital from Rangoon to Naypyidaw without advance notice to Beijing and the Tatmadaw’s military attack at Kokang in 2009; Interview with Chinese analysts, Beijing, November 2011). Some Chinese analysts believe that the suspension “fundamentally shook Chinese leaders’ trust and confidence in Myanmar as a partner, and is going to have a long-term impact over how they perceive Myanmar’s reliability and trustworthiness” (Conversations with Chinese analysts, Washington, DC, November 2011).
4.2 U.S.–Myanmar Engagement
China’s strategic blueprint for Myanmar was based on the assumption that the domestic politics of Myanmar would not undergo drastic changes in the near future, keeping the country isolated and subject to economic sanctions by the West. Naypyidaw’s need for economic development to enhance its legitimacy and the lack of foreign investment sources other than China laid the foundation for China’s absolute position and leverage. However, the rapid improvement of relations between the U.S. and Myanmar since the fall of 2011 altered these assumptions, causing China to lose its monopolistic edge.
Although the Obama Administration announced its engagement strategy towards Myanmar as early as in 2009, China’s concern over the engagement was greatly eased during 2010 and early 2011.13 Up until the summer of 2011, China was extremely pleased to see the engagement “going nowhere” due to Washington’s “obsession” over Myanmar domestic politics, especially the issue of Aung San Suu Kyi (Interview with Chinese analysts, Beijing, July 2011). The American condemnation of the 2010 elections as “neither open nor democratic” reassured China that a rapid improvement of bilateral relations and the removal of western sanctions were still far out of sight (Interview with Chinese analysts, Beijing and Kunming, July 2011). China could still enjoy its “monopoly” of Myanmar’s economic resources and external relations.
However, beginning with President Thein Sein’s meeting with Aung San Suu Kyi, U.S.–Myanmar relations began to improve at a “dazzling speed” (Interview with Chinese analysts, Beijing, November 2011). Not only has U.S. Special Envoy Derek Mitchell paid an historic number of visits to the country since September, Secretary of State Hillary Clinton also travelled to Myanmar three months later, the first U.S. Secretary of State in five decades to make a state visit. That steps toward diplomatic normalization are being taken is crystal clear, highlighted by Clinton’s announcement that the U.S. would start exchanging ambassadors with Myanmar in January 2012 (BBC 2012). The two countries have engaged in substantive dialogues about the new government’s domestic policies and how the U.S. would adapt its economic sanctions to reward certain developments (Interviews with U.S. government officials, Washington DC, November, 2011).
China’s fear of the rapid improvement of U.S.–Myanmar relations is multi-fold. First and most importantly, the warmer ties between the U.S. and Myanmar are essentially seen by Beijing as a conspiracy to encircle and contain China, with potential threats to the Chinese south western border, Indian Ocean access, and the oil and gas pipelines (Guangzhou Daily 2010). In terms of economics, the easing of sanctions could open the floodgates for Western companies to return to Myanmar, creating competition for Chinese companies that have thrived under the sanctions during the past two decades. Furthermore, China is concerned that, as multilateral financial institutions return to Myanmar offering technical assistance, these pro-Western institutions will help Naypyidaw formulate a set of economic, financial, and monetary systems without China’s participation, forcing China to accept potentially unfriendly rules in its future economic activities in the country (Interview with Chinese analysts, Beijing, October 2011). (For example, if experts from International Monetary Fund convince the Myanmar government to accept a new foreign exchange mechanism pegged to US dollars, the existing trade with China in Chinese currency would come under severe challenges.)
In terms of regional influence, Washington’s relationship with Myanmar is being scrutinized within the broader scope of U.S. competition with China in Southeast Asia. Beijing sees the U.S. attempting to economically replace China’s leadership in the East Asia Free Trade Zone with the Trans- Pacific Partnership and politically sabotage the U.S.-free East Asia Community by inserting itself into the East Asia Summit (Interviews with Chinese analysts, Beijing, November 2011). Washington’s engagement with Naypyidaw is seen as another layer in the behind-the-scenes manoeuvring of the U.S. to alienate the traditional friendship between China and continental ASEAN states, thereby strengthening the U.S.’s standing in ASEAN, based on its traditional ties with the maritime ASEAN states (Interviews with Chinese analysts, Beijing, November 2011). Specifically, China is fearful that Myanmar’s improved reputation and regional status might be exploited by the U.S. to advance its agenda at ASEAN on regional issues such as the South China Sea (Interviews with Chinese analysts, Beijing, October 2011). Viewed from these perspectives, China’s assessment of the U.S. presence in Myanmar is essentially zero-sum. Any gains made by Washington will come at China’s expense, either now or in the future. Such a perception is pre-determined by the bipolar power structure and competition in Southeast Asia – a consensus shared by U.S. and Chinese analysts alike (Interviews with American and Chinese analysts, Washington DC and Beijing, November 2011).
Paradoxically, from November to December 2011, the Chinese Foreign Ministry made several statements welcoming the improvement of relations between Myanmar and the West, including the U.S.14 These seemingly contradictory messages by Beijing, however, can be seen as a diplomatic tactic (or diplomatic rhetoric) rather than an authentic reflection of how China perceives Myanmar’s relations with the West. Since China is in no position to alter or slow down the course of such improvements, it may as well appear to publicly welcome them rather than be seen as bitter and territorial (Interviews with Chinese analysts, Washington DC, January 2012). Furthermore, any open opposition by China to the improvement of U.S.–Myanmar relations would constitute interference in Myanmar’s internal affairs and damage China’s relationship with both Naypyidaw and opposition parties (Ding 2011). Therefore, it makes no sense for China to pick a fight that it cannot win while risking more stress over its already-strained relationship with Myanmar.
5 China’s Strategic Misjudgements on Myanmar
China was surprised and frustrated by the unexpected developments in Myanmar’s domestic politics and in its foreign policy, developments which have a direct impact on Beijing’s original strategic planning. The turbulence in China’s relationship with Myanmar during 2011 revealed several basic stra tegic misjudgements by the Chinese policy community about Myanmar and its bilateral relations with China.
Firstly, China fundamentally underestimated the political momentum of democratization within Myanmar. Prior to the 2010 elections, most Chinese analysts concluded that the new civilian government would be nothing more than old wine in a new bottle. In their assessment, its transformation into a civilian government was clearly the military’s tactic to strengthen its legitimacy with no clear intention to give up power. According to a government analyst speaking after the elections, Thein Sein is a transitional figure designed to maintain the stability and balance of power within the new government, not a democratic leader to guide the country towards democracy (Interviews with Chinese analysts, Beijing, November 2010).
The judgment that domestic politics would remain unchanged led to the conclusion that Myanmar’s relations with the West would not improve in the near future, thereby guaranteeing China’s existing and expanding interests in Myanmar, as it remained the primary source of political and economic support for the isolated country.
Ignorance of the domestic political momentum was also reflected through China’s approach toward the anti-China sentiment in Myanmar. From China’s perspective, public opinion in Myanmar did not constitute a critical challenge to China’s interest as long as the government backed Chinese projects. Such support could always be acquired using the “powerful lubricant” favoured during the junta era – bribes (Interview with government analyst, Kunming, June 2010). This logic prompted CPI to rely on “government relations” to smooth obstacles such as public opposition to the Myitsone Dam (Interview with Chinese analyst, Kunming, July 2011). This approach indicated that Chinese government and companies assumed the new government was essentially the same as the military government, prompting them to adopt the same old methods when dealing with it.
Secondly, up until the summer of 2011, China mistakenly assumed that the U.S. engagement had failed, ending after the 2010 elections, when Washington pronounced the elections as “neither free nor fair.” Convinced that U.S. domestic politics, especially in Congress, would not favour acceptance of the new government, Chinese analysts shifted their focus from U.S. engagement to the expansion and deepening of the Chinese presence in Myanmar. Even after the appointment of Derek Mitchell as Special Envoy, China still maintained that the U.S. diplomatic efforts would not produce any results in the near future (Interview with Chinese analyst, Kunming, July 2011). This conclusion is based primarily on the belief that Naypyidaw would not make concessions on issues such as Aung San Suu Kyi and ethnic groups simply to cater to Washington as they, in China’s view, represented fundamental challenges to the rule of the new government and its 2008 Constitution (Interview with Chinese analyst, Kunming, July 2011). This explains why China was repeatedly “surprised” by the level of compromises Thein Sein’s government agreed to and was repeatedly hopeful that Washington had driven Naypyidaw to its bottom line, prompting Naypyidaw to soon push back. China has been quite disappointed that such push-back is yet to take place.
Thirdly, China overestimated its absolute political and economic influence in Myanmar. As the biggest investor in Myanmar, as well as the provider of critical international political shielding for Myanmar’s junta (including a UN veto in early 2007), China believed it deserves certain privileges in Myanmar (Interview with Chinese analyst, Kunming, July 2011). With no removal of Western sanctions in sight, China was comfortably positioned for Myanmar’s continued reliance on China for economic development and political support. Under this premise, China intentionally ignored public opposition to Chinese projects and the anti-China sentiment on the ground, believing that an isolated Myanmar would not dare to challenge Chinese projects and jeopardise future economic patronage.
The failure to accurately assess and predict the future of Myanmar’s politics and bilateral relations reflects a deep-rooted issue with China’s foreign policy toward developing countries. China has a strong tendency to view other non-democratic countries’ politics through its own lens and experiences. Beijing’s reluctance to accept political reform is translated into a general disbelief that any non-democratic government would willingly give up its absolute power. The priority of such governments in China’s view will always be to maintain the current power structure. Rapid political changes, voluntary or not, are often seen as “threats to stability.” In the case of Myanmar, this thinking underlines China’s misjudgement of the aspiration and policies of the Thein Sein government and its policy toward democratic opposition (especially, Aung San Suu Kyi) and ethnic groups.
This “mirror effect” also dominates China’s economic and political relations with many less-developed countries. China believes the fundamental legitimacy of any government should come from its ability to generate economic growth and improve the livelihood of its people. Such a mercantilist value system also characterises the dominant theme in China’s external relations – as long as China helps the local government deliver growth and revenue, Chinese presence should be embraced and welcomed, regardless of any negative impact. In China’s own history, it made similar social and environmental sacrifices during the early years of reform and opening up. The repetition of this development model in less-developed countries, such as Myanmar, is perfectly justifiable and acceptable in China’s perception (Interview with Chinese analysts, Kunming, June 2010). China fails to understand or accept other non-mercantilist approaches toward economic and social development, especially for countries without many alternatives. Therefore, opposition to the Chinese presence in these countries is often interpreted as non-indigenous, instigated by hostile Western forces stirring up local resentment.
2011 marked a turbulent year in China’s relationship with Myanmar. After two decades of relatively smooth political friendship and economic cooperation, China had hoped to bring the bilateral relations to a higher strategic level and turn Myanmar into China’s strategic asset in Southeast Asia and the Indian Ocean. However, such expectations have been greatly frustrated by recent developments in their bilateral relations and Myanmar’s rapidly improving relations with the West. These have served as a wake-up call for China as it attempts to implement its strategic blueprint in Myanmar.
The setbacks China encountered in Myanmar reveal its several strategic misjudgements about the political reality and foreign relations of its south western neighbour. China missed key signs of the democratic momentum inside Myanmar after the inauguration of the Thein Sein government and underestimated the government’s determination to pursue democracy and national reconciliation. Consequently, it failed to anticipate the pace and result of U.S. engagement with Myanmar, miscalculating the degree of China’s economic and political influence in the country. These misjudgements originated from China’s perception of its own political development and economic model, which plays a dominant role in its interpretation of other countries and its external relations with them.
As a result, China has been taking a different look at its policy toward Myanmar. In the near future, China most likely will maintain a “wait and see” posture, refraining from making further political, economic, and strategic commitments to the country, while focusing on the implementation of the existing agreements. Chinese companies and the government have learned from the Myitsone Dam incident to place increased emphasis on and resources into improving relations with the local communities and developing more corporate social responsibility programs. The policy community seems to have accepted the new reality that China will no longer be the sole dominant power and are preparing for new competition in the country. Given its geopolitical reality, Myanmar’s best strategy always lies in seeking a balanced diplomacy among big powers to maximize its leverages and gains. It is an extremely delicate balancing act that requires wisdom and accurate calculations. Naypyidaw certainly doesn’t want to become China’s satellite state; it does not, however, make sense for it to alienate China. What the world has seen in 2011 between China and Myanmar are the natural consequences of Myanmar’s correction of its previous over-dependence on China. At a certain point, Naypyidaw will have to recalibrate its relationship with the U.S., China, and other powers in the region and bring its foreign policy to its traditionally non-aligned, balanced path.
1 For example, senior Chinese leaders made border stability a top priority during their visits of Myanmar, including the December 2009 visit by Vice-President Xi Jinping and the May 2010 visit by Premier Wen Jiabao.
2 However, the Kachin conflict did not result in major refugee flows into China. Interviews, Kunming and Ruili, July 2011.
3 “By the end of fiscal year 2010/2011, total foreign investment in Myanmar reaches 36 billion USD”, [ 2010/2011 360 ], Economic and Commercial Counselor’s Office of Chinese Embassy in Myanmar, May 4, 2011.
4 The difference between the Myanmar and Chinese statistics is due to the different definition of fiscal year, which in Myanmar starts by April 1 each year and ends on the end of March the following year.
5 Li Chenyang, presentation at the conference “China and Myanmar: the Dilemmas of Mutual Dependence”, Georgetown University, November 4, 2011.
6 Although the Vice President Xi Jinping, also a Central Military Commission (CMC) Vice Chair visited Myanmar in the December of 2009, he was visiting under his civilian capacity as the Vice President of China.
7 Chengdu military region is in charge of the security of southwest China, including Yunnan province and China’s border with Myanmar.
8 South Sea Fleet has carried most of the escort missions in the Gulf of Arden, sending naval vessels such as “GuangZhou” and “ChaoHu” through the Indian Ocean.
9 It is said that the Chinese government had left the “government relations” related to the Myitsone dam primarily to the China Power International, the Chinese investor of the project, which used large amount of resources to “obtain” the support of certain senior Myanmar officials. Interviews, Kunming, July 2011. One week before the announcement of the suspension, the Minister of Electric Power, Zaw Min, publicly proclaimed that the project will proceed as planned and the project is in Myanmar’s national interest. UPI 2011.
10 Ministry of Foreign Affairs Press Conference, Chinese Ministry of Foreign Affairs, October 1, 2011.
12 Later, it was said that the compensation would be deducted from the tolls to be paid by China for the oil and gas pipelines upon its completion.
13 China had seen the U.S. engagement with Myanmar as a key component of its “return to Southeast Asia” to undercut China’s security interests in the region. International Crisis Group 2010: 9-10.
14 Press Conferences of the Ministry of Foreign Affairs, Chinese Ministry of Foreign Affairs, November 29, 2011, December 2, 2011 and December 19, 2011.
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Tuesday, March 19, 2013
China’s Strategic Misjudgement on Myanmar
Journal of Current Southeast Asian Affairs